1. Field of the Invention
The present invention generally relates to e-commerce and more particularly to a novel system and process for allocating commissions to promote sales of services and merchandise over the Internet.
2. Description of the Related Art
Over the centuries, commerce has evolved from caravans and ships traveling to remote areas and selling their goods at makeshift bazaars to today's more familiar central distribution and brick-and-mortar structures. Even the brick-and-mortar store, itself, has seen changes as evidenced by such as precedents as, "Wal-Mart's" move from country store to national powerhouse. The impetus to this change has come from a myriad of influences, including the development of the suburb, the highway system, global communication, etc.
Now a new form of merchant distribution has begun to shape how product reaches the consumer, the Internet. This system represents a change so unique that some of the most sophisticated marketing organizations in the world are confused by it. In its simplest form, as to retail commerce, the system seems to allow a consumer to push a button and buy direct from the commercial, eliminating all but the transportation from the factory to the home. This, potentially, is a change of huge proportions.
With this change, however, has come an inherent conflict of systems. The idea of going direct to the market is not a new concept. Infomercials, multi-level marketing (including telemarketing), and the "Fuller Brush" Salesman (now, the "Avon Lady" or the "Amway" distributor) have been doing this for years. Nevertheless, these conventional billion-dollar-plus direct marketers have not had the impact of the Internet.
The conflict over how to embrace both the current distribution system (in whatever form is used) and the new system presents a conundrum. Manufacturers will sell where the customer is; but, the Internet is so new that the means of getting the customer to a given Web site (where the product meets the customer) is the real problem. Some current studies suggest that less than 1.5% of the visitors to a site buy something. This type of demographic makes www.Amazon.com the current exception rather than the current rule. How to shepherd the consumer and lead him to the Web trough is the major focus of every major marketing organization. Three examples, which evidence the inability of the current systems to deal with the opportunities and risks of e-commerce, are discussed below.
A first example is the brick-and-mortar retailer. In responding to the threat imposed by e-commerce, one major hardware store recently informed all of its suppliers, including toolmakers and lawn and garden products companies that that a hardware store may be hesitant to do business with suppliers which compete with the brick and mortar store by selling the same items directly to customers over the internet. Thus, Internet sellers are direct competition to brick-and -mortar retailers.
A second example is direct to consumer marketing. This marketing typically involves individuals having "parties" in their homes during which invitees are shown and sold products. One major manufacturer has recently weighed the wide geographic reach of the Internet against its direct, "party," distribution system. Its reaction was to add a clause to its contracts with distributors and independent sales representatives restricting them from selling product via the Web.
The conflicting problems with direct to consumer marketing is the sheer numbers. In theory, their system could envision everyone with friends selling their products at such "parties". This type of system is immediately at odds with any other form of distribution, as shown by one "direct to consumer" marketer's current foray into shopping mall kiosk sales. This company has spent thousands to convince their sales force that this only heightens awareness of brand, leading to more party customers, but sales representatives see this as direct competition, sponsored by the company.
A third example is the direct to market attempt to embrace e-commerce. Some large multi-level marketers (e.g., pyramid-type marketer) which rely upon increasing market and sales on each distributor bringing in new distributors under them (converting customers to reps, who in turn feed the system by doing the same--each sharing in the sales of the layers below them) have recently begun selling and distributing products over the internet.
Conventional systems provide each sale representative their own Web page as the entry point for a customer, or require a customer to affirmatively add the sale representative's identification number. So long as a customer enters the site through the representative's path, or address, or enters the sometimes-lengthy identification number, the representative receives a commission for all sales. The key is how the customer logs on. This key is also the problem. If a customer enters the site directly or through any other path or referral, there is no system or method for the representative to ensure his or her commission.
There are a number of other conventional systems that allocate a commission for referrals made over the Internet. For example, U.S. Pat. No. 5,819,285 issued to Damico et al. (hereinafter "Damico"), incorporated herein by reference, discloses a method and system for identifying co-marketers who refer customers to an on-line service. The system in Damico embeds a co-marketer identification code within software distributed by the co-marketer (e.g., in CDs distributed in magazine advertisements). When the customer installs the distributed software and enrolls with the online service, the co-marketer is provided a commission based upon the identification code contained within the software.
Additionally, Damico discloses a system for identifying the co-marketer by including a co-marketer code within a URL address. When the customer clicks the link provided by the co-marketer (that contains the specially coded URL address), the system in Damico records the co-marketer's identification along with the customer's information and provides a one-time commission for referring the customer to the online service.
However, the system disclosed in Damico suffers from a number of drawbacks. Specifically, the system in Damico can be utilized only for the initial referral and does not provide commissions based upon the customer's future use (or future purchases). Additionally, the system in Damico only records a relationship between the merchant (online service) and the customer after the customer has enrolled and paid for the online service.
More importantly, the system in Damico does not provide a salesperson with a commission accounting system that promotes active selling of the merchant's goods or services over the Internet (or outside the Internet). To the contrary, the system in Damico only utilizes static links (e.g., links that reside on software diskettes or links that reside statically on Web pages). The invention described below provides a new system that promotes the active sale of products by salespeople through the use of mobile links.
The system in Damico does not provide for the updating of customer or salesperson information. This is because this information becomes irrelevant after the first use under the Damico system. Conversely, the invention described below provides for a database to be updated with each use, assuring the proper allocation of sales commissions to salespersons on future customer purchases.
In addition, under the system in Damico, there is no actual salesperson. The existence and active participation of a salesperson, in and of itself, is one of the unique features of the invention described below.
Another example of a system that allocates commissions over the Internet is described in U.S. Pat. No. 6,029,141 issued to Bezos et al. and U.S. Pat. Nos. 5,712,979, 5,717,860, and 5,812,769 issued to Graber et al. (hereinafter collectively referred to as "Bezos"), incorporated herein by reference. Bezos discloses a system that pays commissions to Web sites that includes links to a merchant's Web site. In a similar manner to the system disclosed in Damico, the system in Bezos utilizes coded URL links to identify the source of the referral (and the basis for the commission). More specifically, when the customer makes a purchase from the merchant, the merchant identifies the referral source from the coded URL and provides a one-time commission based upon the single transaction. Bezos utilizes the well-known concept of a virtual shopping cart, which allows a user to shop for items over a period of time before completing the purchase. In using the shopping cart, Bezos records a cookie on the user's computer. The cookie only includes a reference to the shopping cart and does not include any information relating the customer to a specific salesperson.
Bezos suffers from similar disadvantages as those discussed above with respect to the system disclosed in Damico. More specifically, the system in Bezos can be utilized only for the initial referral and does not provide commissions based upon the customer's future use (for future purchases). Bezos does not attach a "tag" to the customer that shows a salesperson/customer relationship as the invention does (see discussion below). Additionally, the system in Bezos only records a relationship between the merchant (online service) and the customer after the customer has enrolled and paid for the goods.
More importantly, the system in Bezos does not provide a salesperson with a commission accounting system that promotes active selling of the merchant's goods or services over the Internet (or outside the Internet). To the contrary, the system in Bezos only utilizes static links (e.g., links that reside statically on Web pages). The invention described below provides a new system that promotes the active sale of products by salespeople through the use of mobile links.
The system in Bezos does not provide for the updating of customer or salesperson information. This is because this information becomes irrelevant after the first use under the Bezos system. Conversely, the invention described below provides for the database to be updated with each use, assuring the proper allocation of sales commissions to salespersons on future customer purchases.
In addition, under the system in Bezos, there is no actual salesperson. The existence and active participation of a salesperson, in and of itself, is one of the unique features of the invention described below.
The invention described below overcomes these problems with a hardware/software solution that controls record keeping to properly allocating sales commissions without depending upon complex customer supplied sales information.
Glossary of Terms and Acronyms
The following terms and acronyms are used throughout the detailed description:
Client-Server. A model of interaction in a distributed system in which a program at one site sends a request to a program at another site and waits for a response. The requesting program is called the "client," and the program, which responds to the request, is called the "server." In the context of the World Wide Web (discussed below), the client is a "Web browser" (or simply "browser"), which runs on a computer of a user; the program which responds to browser requests by serving Web pages is commonly referred to as a "Web server."
Hyperlink. A navigational link from one document to another or from one portion (or component) of a document to another. Typically, a hyperlink is displayed as a highlighted word or phrase that can be selected by clicking on it using a mouse to jump to the associated document or documented portion.
Hypertext System. A computer-based informational system in which documents (and possibly other types of data entities) are linked together via hyperlinks to form a user-navigable "web."
Internet. A collection of interconnected (public and/or private) networks that are linked together by a set of standard protocols (such as TCP/IP and HTTP) to form a global, distributed network. (While this term is intended to refer to what is now commonly known as the Internet, it is also intended to encompass variations that may be made in the future, including changes and additions to existing standard protocols.)
World Wide Web ("Web"). Used herein to refer generally to both (1) a distributed collection of interlinked, user-viewable hypertext documents (commonly referred to as Web documents or Web pages) that are accessible via the Internet and (2) the client and server software components, which provide user access to such documents using standardized Internet protocols. Currently, the primary standard protocol for allowing applications to locate and acquire Web documents is HTTP, and the Web pages are encoded using HTML. However, the terms "Web" and "World Wide Web" are intended to encompass future markup languages and transport protocols, which may be used in place of (or in addition to) HTML and HTTP.
Web Site. A computer system that serves informational content over a network using the standard protocols of the World Wide Web. Typically, a Web site corresponds to a particular Internet domain name, such as "careau.com," and includes the content associated with a particular organization. As used herein, the term is generally intended to encompass both (1) the hardware/software server components that serve the informational content over the network, and (2) the "back end" hardware/software components, including any non-standard or specialized components, that interact with the server components to perform services for Web site users.
HTML (Hypertext Markup Language). A standard coding convention and set of codes for attaching presentation and linking attributes to informational content within documents. (HTML 2.0 is currently the primary standard used for generating Web documents.) During a document authoring stage, the HTML codes (referred to as "tags") are embedded within the informational content of the document. When the Web document (or HTML document) is subsequently transferred from a Web server to a browser, the codes are interpreted by the browser and used to parse and display the document. Additionally in specifying how the Web browser is to display the document, HTML tags can be used to create links to other Web documents (commonly referred to as "hyperlinks"). For more information on HTML, see Ian S. Graham, The HTML Source Book, John Wiley and Sons, Inc., 1995 (ISBN 0471-11894-4).
HTTP (Hypertext Transport Protocol). The standard World Wide Web client-server protocol used for the exchange of information (such as HTML documents, and client requests for such documents) between a browser and a Web server. HTTP includes a number of different types of messages, which can be sent from the client to the server to request different types of server actions. For example, a "GET" message, which has the format GET, causes the server to return the document or file located at the specified URL.
ISBN (International Standard Book Number). A numerical identifier associated with books, pamphlets, educational kits, microforms, CD-ROM and Braille publications in circulation throughout the world. The ISBN is a ten-digit number assigned to each published title that provides an unduplicated, internationally recognized "identity."
URL (Uniform Resource Locator). A unique address which fully specifies the location of a file or other resource on the Internet. The general format of a URL is protocol://machine address:port/path/filename. The port specification is optional, and if none is entered by the user, the browser defaults to the standard port for whatever service is specified as the protocol. For example, if HTTP is specified as the protocol, the browser will use the HTTP default port of 80.
Cookies. A technology that enables a Web server to retrieve information from a user's computer that reveals prior browsing activities of the user. The informational item stored on the user's computer (typically on the hard drive) is commonly referred to as a "cookie." Many standard Web browsers support the use of cookies. For purposes of this application, the term cookie is a broad term that includes all technology or devices of similar purpose but yet unperfected.